This is a buyer's market so I see no problem to do this. Many properties at the lowest prices in years. You will have to have a knowledgeable agent and seller though. Some may not want to do it because they are not familiar with that.
ERA At the Shore Realty
Broker/Owner 609 425 7121 to 9 PM daily.
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As always, you should work with a qualified and experienced real estate professional in the area to help you find homes that may be suited to your situation.
However, unlike the other Realtors on the site, I think that finding someone willing to work with you in this manner may be harder than you think. Keep in mind that I'm not trying to "rain on your parade", but rather to let you know of the obstacles that you may encounter.
First, you'll be limited to only those properties owned (most likely) by investors since the money you are offering ($20K) would be insufficient for most owners to pay off their current mortgage AND/OR still buy a replacement property. Remember, the loan that an owner would carry with you on this new home will impact their available credit and make the amount of money available to them for their next purchase significantly smaller (in other words, the debt/income ratio is unfavorably affected by a loan with you).
Also, if you are buying from an investor, if the investor is willing to sell to you or work a "rent to own" situation, your credit scores will become an important factor in determining whether or not you're a good "risk" for the investor. I'm assuming that you're only considering this particular purchase method because your FICO scores or debt-to-income ratio will not accommodate a purchase of a property without assistance.
Finally, most investors of rental properties tend to use a "Starker" or IRS Code 1031 Tax Free Exchange to "move up" to newer or larger properties, and to do this, the investor would normally not be able to sell the home to a buyer while also maintaining ownership.
Again, talk with an experienced and qualified Realtor in your area for assistance! Good luck!
Grace Morioka, SRES
Area Pro Realty
San Jose, CA